Mohamed Farouk, CEO of ADESHolding
ADES Holding Co.‘sQ1 2024 profit growth was driven by anincrease in revenues, coupled with the company’s proactive step of hedging for about 60% of its loans, which helped slash costs to about 4%, according to CEO Mohamed Farouk. 
Speaking with Al Arabiya TV, the top executive said that the growth in ADES Q1 revenues was driven byrig additionssince the first months of last year, with six drillingrigsadded to thecompany’s operations in Kuwait andthree others operatedin India.
The company successfully operated19 rigsfor Aramco within about 15 months, whichis anunprecedented achievement globally, as Aramcoapplies the highest standards in the world.
This confirms that ADES serves as a modelforthe localization ofthis strategic and vital industry in the Kingdom, Farouk added.
Regarding earnings before interest, taxes, depreciation, and amortization (EBITDA),the CEOexplainedthatthe majority of the company’s revenues came fromoffshore rigs,which typically have high margins due to their scarcity and high prices.
He went on to say that offshore rigs account for about 80% of the company’s revenue, noting that there are only 400 floating drilling rigs in the world, 49 of which are owned by ADES, making it the dominant player in this field.
Thereis no companyin the worldmanufacturingnew offshore rigscurrently, which means that usage will increase, according to the CEO. He also stated that 30% of the available rigs are more than 35 years old and will be suspended soon, resulting in a decrease in supply and an increase in global prices.
Elsewhere, theCEO saidthatthe company’sdebts fell from SAR 10 billion at the end of last year to SAR 9.7 billion, as about SAR 3.5 billion were due to banks.
ADES has contracts worth about SAR 26.8 billion, indicating that all of its debt is covered by contracts,which allows the companyto work with top banks in the Kingdom.
Givenits strongposition, the company has no intentionto restructure theloans.Rather, itplansto expand its operations through debt in the near future, Farouk said.
Farouk addedthat Saudi Aramcocontributes 75% of the company’s revenues,indicating that ADES operates in nine markets.
Further, the firmsees huge opportunities in India and Southeast Asia, specificallyinThailand, Indonesia, and Malaysia, as these markets face rig shortages and rising oil consumption, Farouk said, highlighting the possibility of winning a number of contracts in the coming period.
As fordividends,the top executive said that ADES announcedduringits share listing that it would begin dividend distribution at 60% for the first half of 2024, starting from the second half of 2024.
According to data available to Argaam, ADESreporteda rise initsnet profit after minority interest to SAR 197.1 million in Q1 2024, compared to SAR 87.6 million in the prior-year period.
Mohamed Farouk, CEO of ADESHolding
ADES Holding Co.‘sQ1 2024 profit growth was driven by anincrease in revenues, coupled with the company’s proactive step of hedging for about 60% of its loans, which helped slash costs to about 4%, according to CEO Mohamed Farouk.
Speaking with Al Arabiya TV, the top executive said that the growth in ADES Q1 revenues was driven byrig additionssince the first months of last year, with six drillingrigsadded to thecompany’s operations in Kuwait andthree others operatedin India.
The company successfully operated19 rigsfor Aramco within about 15 months, whichis anunprecedented achievement globally, as Aramcoapplies the highest standards in the world.
This confirms that ADES serves as a modelforthe localization ofthis strategic and vital industry in the Kingdom, Farouk added.
Regarding earnings before interest, taxes, depreciation, and amortization (EBITDA),the CEOexplainedthatthe majority of the company’s revenues came fromoffshore rigs,which typically have high margins due to their scarcity and high prices.
He went on to say that offshore rigs account for about 80% of the company’s revenue, noting that there are only 400 floating drilling rigs in the world, 49 of which are owned by ADES, making it the dominant player in this field.
Thereis no companyin the worldmanufacturingnew offshore rigscurrently, which means that usage will increase, according to the CEO. He also stated that 30% of the available rigs are more than 35 years old and will be suspended soon, resulting in a decrease in supply and an increase in global prices.
Elsewhere, theCEO saidthatthe company’sdebts fell from SAR 10 billion at the end of last year to SAR 9.7 billion, as about SAR 3.5 billion were due to banks.
ADES has contracts worth about SAR 26.8 billion, indicating that all of its debt is covered by contracts,which allows the companyto work with top banks in the Kingdom.
Givenits strongposition, the company has no intentionto restructure theloans.Rather, itplansto expand its operations through debt in the near future, Farouk said.
Farouk addedthat Saudi Aramcocontributes 75% of the company’s revenues,indicating that ADES operates in nine markets.
Further, the firmsees huge opportunities in India and Southeast Asia, specificallyinThailand, Indonesia, and Malaysia, as these markets face rig shortages and rising oil consumption, Farouk said, highlighting the possibility of winning a number of contracts in the coming period.
As fordividends,the top executive said that ADES announcedduringits share listing that it would begin dividend distribution at 60% for the first half of 2024, starting from the second half of 2024.
According to data available to Argaam, ADESreporteda rise initsnet profit after minority interest to SAR 197.1 million in Q1 2024, compared to SAR 87.6 million in the prior-year period.
